A Stormy Future And Not Just The Weather

It wasn’t just the Babyboomers generation it was that of their parents as well.  This earlier one had seen the backend of the Great Crash and World War 2 together with all the consequential wars and conflicts.  What they wanted was jobs, housing and at the end of their working life, pensions that gave enough to live on with dignity.

This is what the politicians and the rest were expected to deliver and anyone and to say anything otherwise was offensive, false and you could forget any career or prospects in politics at any level.

There are now a number of critics and others that are saying that the pensions part of the deal has gone badly wrong for many reasons and that the hopes and ambitions of the two generations concerned may not be fulfilled and that the generations following are likely to have to settle for much less at greater cost.

Automatic Earth has run the latest bout of pessimism about this under the title of “The Global Demise of Pensions Plans”:

http://theautomaticearth.com/Finance/the-global-demise-of-pension-plans.html

It is a long post with a good deal of discussion and says at the end:

Quote:

There is no need to explain how tough it will be for many people to see 15% cut off their fixed income. And that will be just the beginning. Some pensions plans may temporarily do better if and when they're allowed to invest in risk(ier) assets, but just as many will do worse for that exact same reason. Changing coverage ratio calculations is not a magic wand; it's just another layer of creative accounting, and we've already got plenty of that.

For younger generations, which over a broad range have lower income jobs, if they have any, seeing pension plan premiums rise 28%, and then some more and so on, will become unacceptable, fast. They will soon figure out that the chances they will ever get any pension decades from now are close to zero. So they’ll ask themselves why they should pay any premiums, from the pretty dismal wages they make in the first place.

Over the next few years, this is a battle that will play out in our societies, and it will have no winners. We need to be very careful not to let it tear those societies apart. In a world where just about everyone has to settle for much less than they have or thought they would have, that will not be easy.

Realistic accounting standards would be a good first step, but they will also be very painful. It will be very tempting to hide reality for as long as we can, in the same way we already do with issues ranging from Greece to real estate prices to bank losses to derivatives to our own personal debts.

The best, or even only, advice for those of us who belong to younger generations is: don't count on getting a pension when you reach retirement age. It’ll probably have been moved to age 85 or over by the time you get there anyway.

This is not something that can or will be fixed overnight. It was doomed from the moment baby boomers started producing the number of children they have. It simply hasn't been enough to keep the pension Ponzi going. And those baby boomers, with far too few children to provide for their pensions, have only just started to retire now, as the plans are already in such disarray. I'm sure you can see where this will lead.

Unquote.

There are ample indications in the US that pensions of many in both the private and public sectors are being hammered and obligations or intentions unfulfilled.  In the UK and especially in Europe with some of its generous schemes the damage has been mostly to the private.

There is a general reluctance in the UK and Europe to appreciate that a large part of public sector financial problems arise from the mounting deficits in pension schemes.  It is not just some generous arrangements; there has been a lot of relentless free loading by a few at the tops of the management trees.

In France the new President may well have squeezed the vote because of his promises and pensions and age entitlements.  It is likely that almost anywhere else there will be a reluctance to either recognise or attempt to do much serious about the growing and dangerous risks.

It is the young who are going to pay for all this eventually and they may not want to when they are faced with the bills.  As someone with an occupational pension and who got away with an early retirement I have great discomfort in looking at the figures and the potential difficulties ahead.

We hear about this bubble and that bubble all about to pop but will the pension issue be a matter of just steady decline or another big bust when it hits.

Incidentally, the latest picture from the US National Hurricane Centre looks very pretty but if you don’t like it just look away.

"D" Is For Danger

A couple of items caught the eye today, not directly related but very much connected with each other in various ways.  One was a late catch up on Nicholas Shaxson in “Treasure Islands”, who has returned from his break.

It is that there are three “D” words that are at the centre of most, if not all, of our financial and economic troubles.  They are Deregulation, Desupervision and Decriminalisation.  The consequence is that they have let the people in charge of money and finance out of their cages.

The consequence is another “D”, that is Destabilisation and the idea that because of those three it will never be possible to put things to rights, that is we are reduced to a world of turmoil, conflict and uncertainty.

This short piece is taken from a rather longer one by William Black on “New Economic Perspectives”, a site given to long critical articles by well qualified people.  Some sites, such as Naked Capitalism, have it at the top of their “look list”.

Nicholas Shaxson’s particular area of concern is the operation and function of tax havens and the centrality of their role in the present running crisis.  This includes the City of London.

http://treasureislands.org/the-three-ds-of-finance-and-the-race-to-the-bottom/

The other item came from one of my favourites on the “look list”, Zero Hedge” that some see as the wilder shores of expert opinion in that it is often unrestrained in its comments and conclusions.

This one, longish but not too long, has the engaging hypothesis that Europe is being subject to an unstoppable process of pauperisation.  Personally, I had noticed and chatting in the newsagents this morning learned at first hand some of the horrors now going on in Cyprus, in ancient times one of the richest places on earth.

http://www.zerohedge.com/contributed/2012-08-29/%E2%80%9Cpauperization-europe%E2%80%9D

Also around the web this morning was the persistent view that here in the UK, apart from a limited amount of specialist coverage in the rapidly readership declining “quality” press, there is almost nothing coherent being said about or giving information on the wider European or World situation.

Richard North in EU Referendum suggests that beyond the web or on it, one way to find out at least something is in the German Press.  Looking at that I discovered that the gold medal winning German hockey team in their celebrations managed to do E500,000 worth of damage to the MV “Deutschland”, an Art Deco and well appointed cruise ship used for hospitality by the German Olympics Committee.

With the Germans at the centre of and perhaps critical to any key decisions on what will be what in Europe in the future this was not encouraging.  Chancellor Merkel is in China, which at present is engaging with the West.  Whether this is for mutual support or for China to pick the bones is a question.

This is not the place to get into a debate on the rights and wrongs of the debates on the alleged Chinese voyages of 1421 and 1434 and Gavin Menzie’s theories, see a lot on Wikipedia and the web for all that.  But in the 15^th Century and since there were major withdrawals of Chinese engagement with foreigners.  Could it happen again?

But then, anything can happen.

Kick Starting And Kicking Back

With the economic going being sticky and global trade not being much of a help there are now the cries for “doing something” which can be loosely translated into “doing anything”. 

There are many people, notably in around Westminster, who believe that any spending is good by definition, especially if other people can be forced to pay for it.

The sound bite spin term is “kick starting” the economy.  This is a nonsense on stilts in that the economy has not stopped it is still going.  If it had stopped we would all be starving, without energy or water and without hope.  There are some parts of the world where this has happened but not the UK and Europe, at least not yet.

One good way of making it happen would be to throw vast sums of money at grossly uneconomic and unnecessary projects on the basis of debt in a way that commits all present and future citizens to penury and penal taxation.

There are problems in the economy and they are serious if not addressed soon.  This because we could soon be in a situation where the growth of the population together with all the commitments we have created will persistently outrun any real economic “growth”.  That is economic decline in real terms.

Pumping money into a failing system that is leaking both money and resources on a large scale basis will impact only on the monetary figures at the centre.  Out there in reality it will mean a decline, perhaps slow and steady, perhaps too fast for political and social stability to remain.

The current row over airports, their capacity, their location and the idea that the UK must have a major “hub” serving not just the UK but a wide area of Europe is a case in point.  Tim Yeo, who has demanded the third runway for Heathrow now if not sooner to help our contacts with China has been fingered as someone with major personal financial interests in China.

Sinbad Boris Johnson had proposed a raft of major projects that would involve huge spending on “infrastructure” including a new airport.  These are all in and around London, his political base and would benefit his “forty thieves” in the City of London with whom he is friends.

It is one of the characteristics of the Big Spenders that the bulk of the spending proposed on these projects is in London and the South East.  At present this is the part of the UK where the money classes are better off but on the back of a great deal of low wage labour.

Also, they involve an array of the major companies who are the big lobbyists and who stand to gain very large sums from government spending racked up in this way.  It sounds so easy really, pick out a project that goes well with the media and the BBC, hand over the planning and cash and let it rip.

There are one or two small snags, however.  One is that the economy is flat lining now, all these projects will come on stream only over some years of planning and work.  If the economy does improve then the bills will come in just at the wrong time and they will be very big bills indeed.

The other is who will be working on, managing and providing the equipment and hard ware and all the rest?  At present this in unlikely to be UK firms.  The attrition of so many capital industries has left us dependent on foreigners.  This will mean that the spending, while having some impact in the UK will entail large outflows abroad.

Also large outflows abroad in terms of any profits or interest payments will occur for both structural and taxation reasons.  The companies involved are likely to be financially based abroad, for example a Gulf State, or funnelling their money out one way or another and legally.

One answer, favoured by some is to give more money out in benefits to help boost consumer spending now.  This horse will not run for the reasons that again many of the profits and interest arising from this are already going out of the UK and increasing.  Where were your socks made?  They are not being circulated within the UK.

The difficult part is how to distribute any spending across the UK in such a way that not only does it support employment but it adds to the circulation and is retained in the UK.  Moreover, profits and interest are also retained as much as possible.

Since the mid 1990’s and arguably before our governments has been doing the opposite; along with the banking, finance and many other industries.  So it is not simply a question of “kick starting” which means “kicking back” to the lobbyists, it is a question of a radical change in the culture of government and financial management.

The picture above is a push start, a process that is different.

Asking Questions

The fact that it is nigh on thirty years since I last set foot in any secondary school and in that time have only entered primary school halls to vote allows me an independence of mind when it comes to discussing school examinations.

Mine are but a distant memory when the prime minister was an old man with a big cigar who liked to wave two fingers at the photographers.  In recent years I have made use of universities for their halls of residence for low cost travel, to find the cheapest beer in London and to attend some meetings of interest but again this does not really qualify me to comment in detail.

So what am I blathering on about then in the middle of the current row over UK school examinations?  It is that they really all should go back to basics such as the statistics and their implications.  Quite simply in any examinations system for any purpose there are endemic problems that cannot be avoided.

Long ago when the debate began rolling over the introduction of various forms of comprehensive education one major problem was that in areas of increasing child population where the number of grammar school places was relatively fixed a smaller proportion of the intake would find places.

The supporters of grammar schools, naturally, would ask for more schools or increased size of existing ones to meet this but some would go further.  As there were perennial problems over the selection many people felt that increasing the number of grammar school places would solve them. 

They did not like it when I pointed out that statistically this would push the selection bar up the curve to a point where the numbers at the margin would be greater and hence the issues of choosing one child against another at that point would at least remain or even be exacerbated.

Moreover, in a comprehensive system the problems of selection and giving direction to pupils would simply become internal.  If you eliminated this by avoiding “streaming” or its equivalents you still had the issue in any schools with a large enough intake of how you separated one class from another and again as they got older about who were going in what direction.

The idea of sending half the secondary school population onto university meant that the bar would have to be around the peak of the bell shaped curve where the issues at the margins would be at their greatest. So it is not surprising that the introduction of a national qualification based on a national curriculum has triggered huge rows over results.

Necessarily because they were “national” and heavily influenced by all sorts of ancillary demands together with a clash of ideologies they would be both political and divisive with any real purpose of education or preparation of the future working population driven to the sidelines.

More important the uncomfortable and unwelcome considerations posed by issues arising from any basic statistical analysis of any of the possible policies that might be adopted for school leaving examinations are lost in the fog of battle.

My family memory goes back to the days not long after the introduction of the 3R tests; payment by results for state grants, in elementary schools in the 1860’s when also a number of examining bodies were being founded for a variety of purposes. 

One grandmother who I knew well was listed as a pupil teacher in the 1891 Census.  Her uncle, eleven years older than her, who I knew, was listed as such in 1881.  Since then there have been many changes and many different ideas of what school and other examinations are for and for whom and for what purpose.

In every phase since then and at every stage the essential issues and problems remain and they arise from the figures, demographic changes, the many and various children to be dealt with and the changing world we all live in.

Our problem is that we have persistently allowed vested interests and politicians to visit us with structures and obligations that have often been out dated at the time of their making.  Also, that to select and classify the young is not a science and not even an art; you travel in hope and often do not arrive.

At best it is a hit and miss business and there are no right answers.

Ghosts At The Feast

One of the unhappier features of the scorched earth policy adopted by the previous government was the numbers of their people placed in a wide range of non- government organizations, agencies, quangoes and all the rest at great expense.

They all had their role to play in the bust that occurred.  Then there are all the other famous names, if not on the payroll of one thing, were certainly high on the hog in other ways connected with government and finance.

What is striking in both the UK and the USA is how many of those who led us all singing and dancing down the road to ruin are not just still in place but keep turning up and again and again under governments and parties that are supposed to be doing it differently.

In the Daily Mail finance pages today some of the resentment about this gets personal.  Alex Brummer, the writer, took out an insurance policy with Yorkshire Insurance that travelled a rocky road to end up now at Phoenix.  It is worth far less than he hoped or was promised.

He is far from being alone quoting six million similar policies, the sort which very many people depended on for their future pensions.  To put it crudely, they have all been stuffed.  Many of these people feel that the so-called “light touch” regulation became legalized fraud from which the few have benefitted and too many have lost.

So Alex Brummer is very unhappy to see Sir Howard Davies (see Wikipedia for career) now take charge of Phoenix given that he was one of the men at the top during those happy slappy financial free for all times.  Let ‘em all come, let it all hang out and to hell with boom and bust its all boom boom boom.

http://www.dailymail.co.uk/money/markets/article-2192706/ALEX-BRUMMER-Ghost-revisits-zombie-victims-Sir-Howard-Davies-named-Phoenix-chairman.html

Back in the old days of 1999 and in June of that year I pitched up at the LSE for the welcome to JK Galbraith and the award of an honorary Doctorate in Science.  It was good to see this man of letters, affairs and economics being given credit for his work.

His 1954 book on “The Great Crash” was a particular influence and led to a continuing interest in how financial systems and polities can develop serious flaws, fail to deal with them and then find a bad crash or collapse on their hands. 

It led to a lifelong unpopularity born of pointing out to people that the figures did not work or that their optimism about something may not be justified.  How many times was I told that I did not understand only for me to suggest that my inability to understand might indicate that there was something wrong?

This was the case in 1999 when after the event in the reception that followed the belief that Galbraith and others had taught us how to avoid crashes meant that the dot com boom was sound.  Almost all there thought it would take us all on to great riches and very soon.

In 2003, Sir Howard Davies arrived to head the LSE from the Financial Services Authority (go easy and arrive late) and its continued surge into financial markets and human rights under the guiding fist of Cherie Blair.  The dot com crash was regarded as merely a technical hiccup and normal business had resumed at full throttle.

We have learned a lot since then but have forgotten much.  We do seem to be becoming aware that there is a lot do not really know nor understand.  Also that our liking for predictions that sound good need more care and thought than in the past.  But there are still too many people who do not accept the disciplines of this or who care to change their ways.

The trouble is that they are at the top and are still employing the men and women who have brought us to the brink of failure and another Great Crash.

Feeding Frenzy

While the world is transfixed by the bare faced cheek of Harry von Hosenrunter there are a few things going on.  Not least is Tropical Storm and potential Hurricane Isaac heading for the scheduled Republican Convention in Tampa, Florida.  That the storm in question should have such a name, both of the Bible and the Qur’an ought to give us all pause for thought.

To add to the joy of all doom mongers there is another storm following on across the Atlantic which at the moment could be heading for Massachusetts, where Mitt Romney was formerly Governor.  Isaac could well give the Caymans a bashing where much of Romney’s money went.  Is someone trying to tell us something?

There are other matters as well.  In Russia there is the question of whether there will be any grain exported at all this year.  This is happening at the same time as grain shortages could occur in the US and a high proportion of that harvested may well have to be turned into ethanol to help keep gas (petrol) prices down.

In the UK weather conditions and other problems, notably a major reduction in the bee population could seriously deplete food production.  In any case the dire effects of the combination between the EU agriculture requirements and supermarket pricing are putting many UK farmers and farms at serious risk. 

As for Europe, if the Euro collapses or its complications result in major economic contraction this will impact on agriculture just as much as any other sector especially as the agriculture budget is the big beast of Brussels.

In Australia it is now argued that the mining boom has topped and it is possible some retrenchment may occur.  One reason amongst many is that production in China may not be expanding but at best might be relatively static.  One could go around the world and find a distinct shortage of good news.

The recent row over the news that some at Glencore, one of the world’s major trading and finance corporations sees food shortages as good for commodity and other traders is provoking strong reactions.  There is the inevitable argument that speculation helps to modify price swings as opposed to exacerbating problems.

This will depend on what speculation, how this is translated into distribution at what range of prices and who finishes up with most of the loot.  Given recent history there is every prospect of the market and prices being rigged in favour of the few and their political friends.  This is not the same as open market and pure speculation by large numbers of independent operators.

What we all ought to be worried about is if there may be a world wide category shift in the price of food on a permanent basis.  That is, it is going to be much more expensive in the stores and some foods may rise more sharply in price than the average.  If such foods are those which are part of the basic diets of many people this means trouble.

It will be politically, economically, socially and internationally big trouble.  I can recall the time when food took a much higher proportion out of family budgets than at present and that in a world of tight margins for the majority of people.

But then there wasn’t much debt around because for most ordinary people credit was hard to come by.  In the financial world there was nothing remotely like the leverages common today either in trading or in ordinary banking.  So a major upward in price shift in basic budgets will hit all the harder.

Perhaps we should all start praying whatever our beliefs may happen to be.

Going Nowhere?

When the media in the UK and probably in much of Europe look over the Atlantic to the USA it is usually to New York, California or Washington DC.  Florida has a number of mentions, especially in the hurricane season, when it is active.  For the rest it is only when some disaster, dreadful crime or particular human interest story happens.

Our ideas about the rest are more or less conditioned by TV programmes, films and the stereotypes derived from an America of the past and still too often put over as somehow the present.  But when you look at the detail a different country emerges.

The Burning Platform is a web site of a commentator who writes long posts where he tries to make sense of what is going on there in the economy.  This time round he gives a personal take on a very practical experience.

http://www.theburningplatform.com/?p=39199

He takes his son across the State of Pennsylvania to his University to begin the next semester (term) and describes the America he sees in a journey of 200 miles each way.  There are a few rude words and the nature of his comments in some cases will not be to the liking of many.

But this is not the America we see in our media and it is difficult to see how it fits with all our preconceptions.  Obviously, this is just one small part of the whole so the question is what about the rest of it?  As the web is trawled for news and views around America how does this fit?

It may be that it fits all too often and the picture of a USA as a once major power about to go into a period of rapid decline is a true one.  Can a country go on like that for long after its authority and riches have been dissipated?

Historically, yes it can.  The British Empire staggered on in one form or another for decades during which it went bust during the Second World War.  The old Ottoman Empire was the Sick Man Of Europe for a century.  The Tsarist regime in Russia hung on for at least fifty years in decline.  Imperial China took a lot longer.

In all those places there were elites resolute in failing to admit that the game was up and both their allies and their enemies did not understand the realities and extent of the declines.  As the USA became one of or the biggest and richest political entities in world history the effects of its decline and the rapidity of it will be all the greater.

The figures are beginning to look bad again and population increase far outstrips real economic growth.  A great deal of the growth that is reported is simply money being sloshed around in extreme consumerism and patching and mending, never mind that given over to propping up the political and banking structure.

While this is going on there is another Presidential election where the opponents are each trying to persuade the people that one or other of the America’s they imagine is a reality when they are just illusions. 

To put into footballing terms, the home squad is now forced back into its last quarter and the opposition has brought on its big hitters.  Survival is all you can hope for.  But out there in the sticks hope is a diminishing asset.

What sort of Thanksgiving will it be this year?

The Spirit Of The "F" Word

Watched footie on the TV on Monday evening now that the Premier League and others have begun their season, with the sound off, of course, and soothing music on.  It was Everton against Manchester United and it was evident that the Olympics Spirit has lasted less time than it takes for a Prime Minister to do a U turn.

Within six minutes there had been a flying two footed tackle, a raking of the calf muscles, an obscene haranguing of the officials, a dive in the penalty area and sundry other aggressive antics. 

And that was just Manchester United.  As they did not win anything last year it may be that this time round that they intend to win ugly, as the footie people might say.

As the game wore on and Everton were not to be subdued it did not get any better.  Then Everton scored to the delight of their fans and held onto the lead in spite of a renewed assault.  The Manchester manager, Sir Alex Ferguson moved into his familiar berserker mood chewing his gum as it had never been chewed before.

Does his chewing gum loose its flavour on the bedpost overnight, I ask?  For the answer to this please see and hear on Youtube the Lonnie Donegan rendering of that immortal 1959 skiffle song.  The beautiful game this season looks to be as lovely as a particularly torrid Graeco-Roman wrestling bout.

So for real interest one should turn to the web site The Political Economy Of Football which is on footballeconomy dot com.  It seems that an analysis of supporters shows that Manchester United have only a low proportion of their support that are truly “local”.  The article on this has some surprising other results.

Another article deals with the fact that George Soros has taken an eight per cent holding in the recent Manchester United share issue.  This may or may not be connected to other investments in the owners Glazer brothers’ outfits.  But in any event there has been extensive shorting in the markets on these shares.

It may be that Ferguson has lost money on this.  He is good at losing money, notably on horses that don’t quite run.  This may explain his delayed retirement.  Or perhaps he was hoping for rapid rise in the share values to bolster the family fortunes.  The club are said to be amongst the richest and best endowed in the world.

The problem is that much of this wealth is mingled with a lot of parallel debt in uncertain markets and based on an economic activity that is even less certain.  For confirmation of this look at the situation at Portsmouth FC a once great club who are in dire trouble. 

Also look for Darlington1883, newly formed from the wreckage of the former Darlington club that collapsed in recent years, losing their ground and being thrust down the leagues.  Coventry City may be forced out of the Ricoh Arena to go goodness knows where.

Then there is Glasgow Rangers, a major and well supported club broken by fancy finance and not poor football.  They were sent down the Scottish Leagues because of poor accounting rather than play and perhaps out of the spite that seems to attend too many Scottish issues.

Could any of this happen to Manchester United?  If this can happen and has happened to other clubs then it can happen to any club.  The way things are it is very likely to be the experience of one or other clubs in the coming season.

One of the main sources of income to football these days comes from sponsorship by betting firms who now have significant revenue from punters making all sorts of wagers on results, who does what, and what happens when?

It is a pity that none of them are in the business of bets on who goes bust and by how much.  For that you have to go to the financial markets.

Forty Years On When Afar And Asunder

“Parted are those who are singing today.  When we look back and forgetfully wonder what we were like in our work and our play.”  Forty years ago, local government was reformed by the 1972 Act, the new system was installed on 1 April 1974 and by 1976 the UK was broke and in hock to the IMF.  Probably you need to be something over 60 to recall the scale of the mess we were in and how we got there.

The words are taken from the Harrow School song, Sir Winston Churchill would have known it, but by 1974 his Great Britain had gone never to return.  Now in 2012 the United Kingdom that replaced it is going and also will never return. The details of the mess we are in now and those in 1974 differ but the principles apply.

When the new authorities took over many found that the former authorities had run down the general financial reserves, sometimes leaving nothing.  At the same time often repairs and maintenance had been cut to release money for new vote winning schemes and popularity for some local politicians.

In particular buildings and road maintenance reserves had gone, again to all sorts of projects often designed on a have it now pay later basis.  Promises had been made to many staff and salary and pension rights ramped up before vesting day.  The accounts were faked or forgotten or lost.

One feature was that before reorganisation there had been serious imbalances in rating values from one area to another and in types of building.  When this was rationalised a lot who had enjoyed cheap rates were being hit.  What was worse was that the high inflation of the period meant that everyone paid more in cash, despite some gaining in real terms, but they did not see it that way.

Edward Heath, the then Conservative Prime Minister made the mistake of trying to take on the miner’s in the middle of it and then calling a snap election early in 1974.  He lost and Labour under Harold Wilson took control, conveniently blaming the Conservatives for the mess that was revealed in local government.

On 15 March 1974, John Poulson, architect extraordinary was jailed for fraud and corruption.  He was active in a number of the old local authorities with the paradox being that a high proportion of them were Labour held mining communities.  Had Heath waited it might have been different, but as Poulson buttered up a few Conservative ministers perhaps not.

Reginald Maudling, Conservative Chancellor of the Exchequer, who left The Treasury in a mess was associated with him.  His wife wanted to make East Grinstead the ballet centre of the world.  It was trying to help out this expensive project that may have been the straw that broke the back of Poulson’s companies.

As I remarked at the time “It was all tutu expensive”.  But nobody laughed, but it was in a meeting attended by Labour councillors former friends of Poulson.  That some had been given fun times in London with ladies for hire was giving them cause for concern, especially if the wives found out.

Harold Wilson and Jeremy Thorpe, an Old Etonian and the then Liberal leader did a deal in 1974 and Labour took power.  Look up Jeremy in Wikipedia for another grim tale.  Looking back I wonder now whether Harold Wilson had already begun his decline into dementia by 1974 and came to realise it in 1976 when he resigned.

Then as now there were many changes under way which we neither recognised nor understood.  Even the few that did realise that some things were changing irrevocably misjudged the scale and potential impact. 

North Sea Oil was on its way, sea transport by container was transforming trade, major companies, such as Rolls Royce had gone to the wall.  The railways were facing the loss of most of the freight traffic. 

Cheaper holidays were transforming travel and tourism.  The old basic industries of the economy were becoming neither basic nor economic and the subsidies handed out were not working.

Also, we had been led into the European Economic Community on false promises and a pack of lies.  To do this we ditched the Commonwealth and imagined that Europe could replace the faster developing markets of the rest of the world.

Forty years on and the world is turning again.  Just as nobody can go back to the 1970’s now nobody can go back to 2005.

Keeping In Tune With The Times

The Euro morass has gone beyond the capability of almost anyone to understand it.  As the situation seems to be changing day by day keeping track of it has become impossible for most ordinary commentators, let alone experts or those immured in government or other official departments.

For this reason one has to be shy not only of making predictions but of trying to say or claim things with any certain authority.  What is worse is that you cannot trust any of the figures you see and nor can you trust any of the major players.

Amongst the few probabilities is that the UK contribution to dealing with it will be about as useful as using a wet flannel on a vehicle engine fire.  The first priority for the US in Washington DC is to try to hold the line until after the election.

Within Europe itself the key seems to be with Germany.  But is this Germany itself or Germany moving to be the lead element in an EU becoming a super state by default?  There is talk enough about such a Greater Germany, but many Germans do not want it because of the cost and all the unseen liabilities.

France is allegedly more broke than Spain but the need to keep its mega banks in being disguises this.  Spain certainly is broke as a consequence of making most of the mistakes to be made in the book. 

Italy, benefitting or not from a government imposed by the EU is facing a choice between subjection, bust or Berlusconi.  That the last could be the preferred option of the people is not good news.  Greece, Ireland and Portugal are all still in the mire and unlikely to be out of it for some time.

Around the web, but only in some specialist media forms there is a great deal of expert analysis and opinion.  But because of the situation even those best equipped to have a measure of understanding struggle to stay in the game.

Could they all manage to flounder on in the hope that something will turn up or one of the many meetings come up with a workable set of propositions?  Not really, because Europe is not on its own, it is plugged in to a global network where there are other elements whose failures might have a disproportionate impact.

There are certainly all the pre-conditions in place for a serious collapse to occur.  The issue is whether the situation is now in a critical phase where some event or related occurrences could cause the fuses to blow again, black swan or otherwise.

I wish I knew, but I wish even more that someone knew and could do something coherent and effective.

And the band plays on.

Questions Of Sport

Soon the Paralympics will begin, although some things will not be quite the same as aspects of the other Olympics.  The picture above is that of Stoke Mandeville Station to which I once sent many parcels and some passengers.

It is reported that Usain Bolt, one of the heroes of the track has announced that unless the UK changes its tax laws relating to earnings made in the UK by those from overseas in sport and entertainment he may not return here.

One of the lesser known features of the recent Games is that amongst the Diktats laid down by the International Olympics Committee for the UK to be hosts was a temporary revocation of these taxation requirements. 

The irony of athletes only being willing to compete if the taxation deals were right in an event largely paid for out of either present taxation or future taxation in the form of state borrowing seems to have lost on Mr. Bolt and perhaps others.

I wonder whether some of the joy and rapture shown by the sports men and women on winning medals may have had something to do with future sponsorship deals and media rights.  Those of us who follow UK soccer will know full well that these issues are often critical to which player joins which club.

The BBC ran a programme related to the Paralympics centring on Dr. Ludwig Guttman at the Stoke Mandeville Hospital in the 1940’s and later and his work on enabling seriously injured and handicapped persons to engage in ordinary activities including games and sports.

This was allied to other neurological work done in other places in the search to give not just life but a meaningful one within the community to all those suffering from severe impairments for one thing and another.  The implications of this were far from fully realised at the time or even now to a great extent.

Around forty years ago in the early 1970’s because of new facilities being created for the education of the handicapped I attended a conference at Stoke Mandeville about the developments that were in train in that field and what the future might hold.

It was becoming apparent that not only were many children now surviving but often their expectation of life was rising.  Once having a severe handicap would have meant either an early death or a very limited lifespan with little capability.

All this was about to change.  With a little knowledge of demographics and statistics it dawned on me that the long term implications were much greater than most people realised.  It was not just a question of more money and a few more local specialist facilities; it was a lot bigger than that.

Whilst those of us who could run the figures, work out some of the logistics and recognise the wider social and employment considerations realised that it was going to become a lot more complex and changes would follow across the board it was very difficult to get others to accept just how much would have to be done.

The trouble was that while politicians were happy to use the handicapped for vote winning photo opportunities or being seen to be “do gooding” when shove came to push there were always well down the agenda for much in the way of real progress.

If the Paralympics allows some realisation of the much greater and wider needs than those of forty years ago it might have some benefit.  Although those taking part I suspect will not need any major tax breaks.

Only some recognition of their capabilities and the potential contribution they might make.

A Gordon For Me

While the weather forecasters tell us what fun the next round of blistering heat will bring, forgetting those who either do not like it or are vulnerable, it may not last.

From the US National Hurricane Centre comes their latest information about Tropical Storm Gordon.  Potentially, this could become a hurricane but the chances are that it will remain a storm or just a severe depression.

Where it might strike land is still uncertain and not even Michael Fish (remember 1987?) can assure us on that point.

The chances are that it will be just a run of good weather, lots of rain and refreshing wind but for inveterate pessimists there is still hope of much worse.

It does remind me (oh not again) of an old song.

http://www.rampantscotland.com/songs/blsongs_gordon.htm

My memory of The Gordons regiment is that they were not chaps to annoy and you had to mind your manners.

But then neither were the HLI, the Seaforths and a few others.

Thought For The Day Third

This one has been on the machine for a time now and I have forgotten the source.  But with the Westminster and London PR people urging us to be nice to those who run banks and have been a little out of luck lately perhaps it is time to use it.

Especially, with all those items on Zero Hedge telling us that European banking is doomed and there is no way of stopping it.

Thought For The Day Second

In the last couple of days or so there has been a swarm of earthquakes at the Katla Volcano in Iceland and other large earthquakes south of Iceland. 

They could be something or nothing, but given the favourable attention given to Iceland’s handling of its financial and economic crisis one wonders if the ancient Gods might be getting restless.

Thought For The Day First

Sinbad Boris Johnson, the brood Mayor of London was fervent in support of his local bankers, Standard Chartered, who have forked out a third of a billion in fines for being shifty with the accounts.

His recent elevation to the Zip Wire brought to mind one song from another age, two minutes long.

http://www.youtube.com/watch?v=_K1BdDVvV9Q

They should have left him there.

Another Day Another Complication

Taken from “The Local”, Germany’s news in English, it seems that distaste for the EU and the current nation states embroiled in it is not just a UK matter.  There are those in Bavaria who now argue that Bavarian Is Best.

Skipping all the obvious stuff about the strange King Ludwig II and Richard Wagner, the composer, it has taken some time for leading Bavarians to come round to the idea that they are better off out than in, and that means Germany as well as the EU. 

This one could run and run.

Quote:

A respected old-timer in the conservative Bavaria-based Christian Social Union (CSU) has called for independence for his beloved state, arguing that its wealth is being fleeced by Berlin and Brussels.

The 73-year-old Wilfried Scharnagl, a well-known name within the CSU - the sister-party to Angela Merkel's Christian Democratic Union - is to publish a book this week entitled "Bavaria Can Go It Alone," the Münchner Merkur reported on Sunday.

"Bavaria," he told the paper, "comes out too badly in context."

That context, laid out in his 191-page tome, is an historical analysis going back to 1871, when Bavaria became part of the new unified German nation. That day, "The Day of Disaster," as Scharnagl calls it in a chapter heading, was when "the kingdom was absorbed into the Prussian-ruled German unified state."

As a result of that fateful move, Bavaria is now in a "stranglehold", held in "double oppression" by Berlin and Brussels, the Bavarian veteran said.

He describes some of Germany's budget arrangements, such as the inter-state fiscal adjustment which distributes tax money among Germany's 16 states, as a "plundering" that consumes billions in Bavarian wealth, while the euro debt crisis reinforces the "lurching between fantasies of power and powerlessness."

He argues that federal measures to balance conditions in Germany have always damaged standards in Bavaria, such as the level of education, which he calls Bavaria's "crown jewel." "I've never known levels to be adjusted upwards," he said.

Scharnagl worked for the CSU's party leadership in Bavaria for many years, and was editor-in-chief of the party's newspaper Bayernkurier for 24 years. He was also considered a close personal advisor to Franz Josef Strauß, former German finance minister and Bavarian state premier from 1978 to 1988.

Scharnagl's word is still said to carry weight within the party, though the new book is likely to alienate some of his political allies. Only the minority separatist Bayernpartei officially supports independence. His own party briefly toyed with the practicalities of independence under state premier Max Streibl in the early 1990s.

Scharnagl considers his book an important provocation. "It is at least a wake-up call, to say that this state should consider its peculiarities, its uniqueness," he told the paper.

Unquote

Next up the Duchies of Bremen and Verden, perhaps?  For a long while in the 18^th Century and into the 19^th these were attached to Great Britain.  If the UK could exit the EU perhaps they would like to rejoin us, along with Hannover.

We could have “The Old Hundredth” as a new National Anthem.